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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Make the money move with funds funds funds Posted by Mr. Bling Bling on April 08, 2002 at 10:54 PM Make the money move Is there a cycle of finance in buying foreclosures.. A purchase of a foreclosure home has the following (debt + equity + invested equity) Equity = capital capital = income income = payment to debt debt = liability to pay loan What is the best way for a investor to finance the purchase of a foreclosure home without using any income but invested equity? Case 1 (Refinance). A purchase of a VA home. The home is bought for $190,000. Invested equity in the home is $9,500 (5% down on 190,000). Home value = $260,000 Home loan (debt) = $180,500 Total equity invested = $9,500 Equity earned from purchase = $70,000 Total loan debt from taxes, insurance, and mortgage loan = ($1500 a month) Case 1 (Refinance) - The purpose for this project is to sell the property to make a quick return. A return in company name or a individual name is to be determined due to tax issues. Using the 1031 tax law would help someone if they were going to transfer equity to another investment (tax free). If this property was sold as an individual or to say from a personal home - I am not sure how much taxes would be taken out for a loss of profit. If this project was a income property it could be refinanced with a hud 203k loan. This 203k loan would allow an individual to pay for the fix-up cost's for an income producing property (all in one loan). A apartment building is a good example. The income from the rents would keep the payment on the 203k loan. But what about financing a single family home? Like in case 1. Would an investor pay $1500 out of his pocket until a mortgage company would let him refinance (6 months later). Would the investor use equity to be refinanced into captial (hard cash) to pay debt? Is it possible to have a formula to work with to finance houses in forclosure. Say a 30% rule! Example - buy a home worth $260,000 and purchase the home for $190,000 from the VA. Refinance to $208,000 (80% LTV) and use the $28,000 in equity to pay off the debt until the property is sold and enjoy the (20% profit). This system could cause a rapid purchase of homes if you could find a hard money lender to wire you money for the invested capital (Credit cards or hard money lenders). Maybe have a ratio of rentals to support the debt for the fast flip homes. Has anyone used a system like this? Did it work? Can anyone say "bling bling" ? Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : Make the money move : Is there a cycle of finance in buying foreclosures.. : A purchase of a foreclosure home has the following (debt + equity + invested equity) : Equity = capital : capital = income : income = payment to debt : debt = liability to pay loan : What is the best way for a investor to finance the purchase of a foreclosure home without using any income but invested equity? : Case 1 (Refinance). A purchase of a VA home. The home is bought for $190,000. Invested equity in the home is $9,500 (5% down on 190,000). : Home value = $260,000 : Home loan (debt) = $180,500 : Total equity invested = $9,500 : Equity earned from purchase = $70,000 : Total loan debt from taxes, insurance, and mortgage loan = ($1500 a month) : : Case 1 (Refinance) - The purpose for this project is to sell the property to make a quick return. A return in company name or a individual name is to be determined due to tax issues. Using the 1031 tax law would help someone if they were going to transfer equity to another investment (tax free). If this property was sold as an individual or to say from a personal home - I am not sure how much taxes would be taken out for a loss of profit. : If this project was a income property it could be refinanced with a hud 203k loan. This 203k loan would allow an individual to pay for the fix-up cost's for an income producing property (all in one loan). A apartment building is a good example. The income from the rents would keep the payment on the 203k loan. : But what about financing a single family home? Like in case 1. Would an investor pay $1500 out of his pocket until a mortgage company would let him refinance (6 months later). Would the investor use equity to be refinanced into captial (hard cash) to pay debt? Is it possible to have a formula to work with to finance houses in forclosure. : Say a 30% rule! Example - buy a home worth $260,000 and purchase the home for $190,000 from the VA. Refinance to $208,000 (80% LTV) and use the $28,000 in equity to pay off the debt until the property is sold and enjoy the (20% profit). This system could cause a rapid purchase of homes if you could find a hard money lender to wire you money for the invested capital (Credit cards or hard money lenders). Maybe have a ratio of rentals to support the debt for the fast flip homes. Has anyone used a system like this? Did it work? : Can anyone say "bling bling" ? Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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